How Much Is Your Cash Earning for You?

Do you know how much your cash is earning for you right now? If your money is sitting idle in a non-interest-bearing account, the answer might surprise you. In today's rising interest-rate environment, leaving cash languishing in a checking account or traditional savings account can actually be costing you money.

Many people underestimate the impact of keeping their cash in accounts that don't earn interest. With inflation steadily eroding the purchasing power of your money over time, it's more important than ever to ensure that your cash is working for you.

According to a recent article in The Wall Street Journal, American consumers missed out on a staggering $42 billion in interest last quarter by sticking with big banks (Bank of America, Citi, JPMorgan Chase, U.S. Bancorp, and Wells Fargo) and leaving their cash in non-interest-bearing accounts. That's a significant amount of money that could have been earning a return and helping to grow your wealth over time.

So, what can you do to make sure your cash is earning its keep? One option is to consider investing your cash in a money market mutual fund like Schwab Value Advantage Money Fund®. This fund is currently yielding 5.16%, offering a higher yield than traditional savings accounts while still providing liquidity and stability. Money market mutual funds invest in short-term, high-quality debt securities, making them a relatively safe option for parking your cash. Reach out to your advisor if you would like to discuss money market mutual funds further.

Another option to consider is a high-yield savings account. These accounts offer competitive interest rates and are often offered by online banks, which have lower overhead costs compared to traditional brick-and-mortar banks. By shopping around and comparing rates, you may be able to find a high-yield savings account that offers a better return on your cash than your current bank.

By taking the time to reassess where your cash is parked, you can ensure that your money is working as hard as possible for you. Whether you choose to invest in a money market mutual fund or opt for a high-yield savings account, the key is to make sure that your cash isn't just sitting idle. After all, every dollar counts when it comes to building and preserving your wealth for the future.v